U.S. Stocks Extend Yearslong Winning Streak

The U.S., by contrast, is less reliant on Russian oil, while counts of Covid-19 patients admitted to hospitals have fallen substantially. And many investors believe the U.S. economy entered the geopolitical tumult of recent weeks in strong enough shape to withstand the jump in oil prices and heightened anxiety sparked by Russia’s invasion of Ukraine.

The S&P 500 rose 6.2% last week, its best performance since November 2020, after the Federal Reserve raised interest rates for the first time since 2018. The index is now up 5.6% since Russia invaded Ukraine and has trimmed its losses for the year to 6.4%.

The recent rally extends years of U.S. outperformance. Since the start of 2010, the S&P 500 has quadrupled, while an MSCI index tracking stocks outside the U.S. is up about 30% over that time.

More recently, Germany’s DAX index is down 1.5% since the Russian invasion on Feb. 24. The Shanghai Composite has declined 6.8% and Hong Kong’s Hang Seng has tumbled 9.5% over the same period.

“The U.S. is a safe haven in an increasingly unsafe world,” said Jim McDonald, chief investment strategist at Northern Trust, which was managing $1.6 trillion at the end of 2021. 

This week investors will look to a speech Monday by Fed Chairman

Jerome Powell

for further clues about the economic outlook. They also will parse earnings reports from

Nike Inc.

,

General Mills Inc.

and

Darden Restaurants Inc.

to gauge the strength of the U.S. consumer.

The U.S.’s production of energy and agricultural products helps insulate it from the recent increases in commodities prices, while a strong U.S. labor market should support the domestic economy, Mr. McDonald said. Northern Trust has been buying U.S. stocks over the past month and selling shares from other parts of the world, he said. 

The Chicago-based firm isn’t alone. Money managers in recent weeks have shifted their appetites for regional equities, loading up on U.S. stocks and dropping shares of European companies. The net percentage of respondents to BofA Global Research’s global fund manager survey who said they were overweight U.S. equities jumped 27 percentage points from February to March, returning the country’s stocks to a net overweight position in the poll.